The media still seems baffled that prim and proper England would be almost brought to its knees by what the London Daily Mail newspaper referred to as “nihilistic and feral teenagers” rioters. For four days anarchistic youths “from all walks of life raced around the streets mindlessly and desperately hurling bricks, stones and bottles at the cops while looting here and setting bonfires there, leading the authorities on a merry chase of catch-as-catch-can as they tweeted their way from one strategic target to another.” The British Social Welfare State that Margaret Thatcher and her Conservative Party dismantled thirty years ago has come roaring back with 14 year of Labor Party rule.

Today’s British youth have been indoctrinated in school that Thatcher was an anti-democratic fascist, who denied the public their entitlements. It should not be surprising that this generation of “Mini-Me” leftists would act out now that Parliamentary control a broke U.K. has gone to the Conservative Party under David Cameron to return the nation to solvency.

It has been 21 years since Thatcher retired as British Prime Minister. During her 11 year reign as the “Iron Lady” she systematically reversed England’s precipitous economic and military decline. When the she became Prime Minister in 1979 the U.K. was in a severe recession. Violent riots broke out in the South London neighborhood of Brixton over demands for more social spending. Scores of buildings were burned and 2500 policemen were injured and as the violence raged. The rioting spread to Liverpool where over a four day period 150 buildings burned and 781 more police officers were injured. Police were finally forced to use CS gas for the first time on the British mainland to quell the unrest.

The Iron Lady’s tough response to the rioters was applauded by the public and gave her the mandate to carry out her agenda of fiscal conservatism. She implemented economic policies that led to the sale or closure of state-owned companies, deregulation of British industry and the financial sectors, flexibility in labor markets, and withdrawal of state subsidies. After a rough start, British GDP rose twice as fast as government spending for the first time since the 1920s. Thatcher demanded balanced budgets and refused to be suckered into adopting the euro currency. When Thatcher retired in 1990, the U.K. was considered a growth engine of Europe.

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A new study from the Adam Smith Institute in the United Kingdom provides overwhelming evidence that class-warfare tax policy is grossly misguided and self-destructive. The authors examine the likely impact of the 10-percentage point increase in the top income tax rate, which was imposed as an election-year stunt by former  Gordon Brown and then kept in place by his feckless successor, David Cameron.

They find that boosting the top tax rate to 50 percent will slow economic performance. And because of both macroeconomic and microeconomic responses, tax revenues over the next 10 years are likely to drop by the equivalent of more than $550 billion. Here’s a key paragraph from the executive summary of the new study.

The country is suffering from a 50%-­plus marginal tax rate which even its architect admits was imposed without economic purpose. Now our analysis shows that the policy is set for failure: at best leading to flat growth for a decade and £350bn of lost revenue. The Chancellor should seize the occasion of the 2011 budget to reverse this disaster promptly, for the benefit of public revenues, economic growth, the government’s standing with domestic wealth-creators, and the UK’s reputation with world business.

The authors urge Prime Minister Cameron to reverse this disastrous policy, but the odds of that happening are very slight. I hope I’m wrong, but I have repeatedly noted that Cameron almost always makes the wrong choice when deciding between liberty and statism.

President Obama wants to impose similar policies in the United States and there is every reason to expect similarly poor results. I’ve already posted evidence from IRS data showing that the rich paid much more tax following the Reagan tax cuts, so it shouldn’t shock anybody when the reverse happens if Obama is successful in moving America back toward a 1970s-style tax system.

To emphasize these critical points, let’s close with two videos. This first video explains the Laffer Curve and why politicians are foolish if they assume that there is a fixed linear relationship between tax rates and tax revenue.

This second video debunks the notion of class-warfare tax policy.

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Yesterday, British Prime Minister Gordon Brown announced that he would pick up his ball and go home, clearly the way for a possible Labor/Liberal Democrat coalition government. David Cameron and the conservatives would continue on in opposition. Cameron, of course, tried to ‘moderate’ the Conservatives and, in the process, squandered a double-digit lead and fell short of an outright majority. Yes, there is a lesson here.

Panic has gripped stock markets worldwide over the Greek debt crisis and the threat of a debt-deflation contagion through banks in Europe (primarily) and the U.S. that own the bonds of Greece, Portugal, Spain, and so forth. If these bond asset prices collapse totally, lending facilities would be badly crimped for both the short and long term. And that, in turn, would damage prospects for economic recovery.

The Dow closed yesterday off nearly 350 points. Earlier in the day the Dow was down 850 points, though there is talk of computer glitches and technical problems that may have temporarily undermined trading. Either way, the market is getting creamed as a result of the Greek story.

The real winner? Gold. It’s up about $25, to $1,200. People want real money. They do not trust the debt-laden currencies of Europe and the United States. Or for that matter Japan. Gold is fast becoming, once again, a reserve currency of choice.

Meanwhile, the EU/IMF bailout package for Greece, which does include draconian budget cuts, contains a 2 percentage point increase in the VAT tax that is anti-growth. Steve Forbes correctly said Wednesday on CNBC that the Greeks should be slashing spending and should move to a flat tax, just like the countries in Eastern Europe. I gave him a Nobel Prize for that.

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Britain’s Labour Party Prime Minister, Gordon Brown, is in an uphill battle to retain a majority in the House of Commons. His party may pull him across the finish line in this week’s election.

He’s certainly done nothing on his own to endear himself to British voters. You can’t really rally the voters with a stirring cry of: “It could have been worse.”

Just as he headed into the climactic week of Britain’s mercifully short campaign season, Gordon Brown was caught in a Joe B*Den moment. He did not realize that his microphone was picking up his nasty comments about a woman voter, a Labour Party backer, even. Brown had just finished sucking up to Mrs. Duffy, complimenting her on her red jacket, when he ducked back into his limo. There, he was overheard denouncing the woman as “bigoted.”

Why? Because Mrs. Duffy dared to express her concerns over Britain’s broken immigration process. Over the past forty years, Britain has admitted hundreds of thousands of immigrants from the former British Empire. Many of these immigrants become fine British subjects. But a disturbing number are jihadists who have converted large swaths of English towns into “no go” areas for local police. They want to create Londonistan.

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The ink was barely dry on the $150 billion EU/IMF bailout of Greece when world stock markets tanked on two major fears. First, financial analysts are concerned that the bailout money won’t be enough to cover Greece’s borrowing needs from its out-of-control budget deficit. Second, there are fears that the EU/IMF deal will not be approved by the German parliament in a vote scheduled for Friday.

Additionally, there are new worries that the Greek debt contagion will spread to Spain and elsewhere in Europe. The looming specter of debt default and deflation is heavy in the air for investors worldwide.

Making market matters even riskier, German chancellor Angela Merkel faces key regional elections this Sunday in populous North Rhine-Westphalia, including the conservative areas of Cologne, Bonn, and Stuttgart. These cities hate government debt and overspending as much as the rest of Germany, if not more so.

The great postwar German leader Konrad Adenauer came from Cologne. He was a conservative Catholic who despised Nazism and Soviet communism. He also was an inflation fighter. To stop hyperinflation in the postwar period, Adenauer sponsored the new German mark and linked it to the dollar, which in those days was as good as gold.

Today, all of Germany still hates inflation.

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Barack Obama, it was claimed, would “repair” our reputation both with our enemies and our friends. So how has he done? Let’s take Britain for example. Has he “fixed” our special relationship with the British Isles? Well, if by fixed you mean he has fastened that relationship to a negative track, well then “fixed” it is.

Let’s review some of the slights that Barack Obama delivered to our closest allies, the British.

In February, immediately after he entered office, President Obama summarily rejected the most famous bust of Winston Churchill in England loaned to the U.S. for display in the Oval Office by the people of England. The bust was sent to us by the people of the U.K. as a gesture of solidarity and friendship in the aftermath of 9/11. Despite their generosity, Obama returned the generously loaned statuette without alerting the Brits that he intended to do so, blindsiding Prime Minister Gordon Brown’s government.

Then in March Obama slighted the British once again by refusing to meet PM Brown at the airport in the previously arranged welcome-to-America press conference when the Brown’s came for a state visit.

During that same visit Obama callously gave Brown, a man who is nearly blind, a set of American DVD movies as an official gift from the U.S.A., movies that won’t even play on English DVD machines (America is “Region 1” while England is “Region 2” in DVD formats). To add insult to injury Mrs. Obama gave the Brown’s boys a few cheap toy helicopters from a Washington gift shop — likely made in China. On the other hand PM Brown gave some significant and thoughtful gifts to the Obama’s and our nation.

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Did Republicans lose in 2006 and 2008 because they were too far to the left or too far to the right? And which approach should they adopt if they want to regain power in 2010 and 2012? Some people think the GOP needs to be more moderate. David Frum, for instance, says Republicans need to mimic David Cameron in the United Kingdom. And at his website, Frum highlights this (rather disturbing, as I will explain below) video of Cameron making a pitch to the British people.

First, the good news about the video. It is possible that Cameron intends to do good things about education and welfare policy. Unfortunately, it’s also possible that he intends to do bad things. But we don’t know since there is nothing but rhetoric. Speaking of rhetoric, it is troubling that he also has lots of language about a “fair” society and the gap between rich and poor. This doesn’t necessarily mean he intends to push bad policy. A policy of smaller government and free markets, after all, will boost economic growth and help poor people climb the ladder. Shrinking government also will reduce the power of special interests, which will make society more fair. But it’s also possible – and perhaps more likely – that he is using this rhetoric to signal support for more redistribution.

What is most troubling, though, is that Cameron sides with government and against taxpayers whenever he gets specific about policy.

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In a recent puff piece, The New York Times reports that our President is tired. This is not the first such report. Back in May, when he treated England’s Gordon Brown so shabbily, the excuse given — according to The Daily Telegraph – was that wrestling with the economic crisis had left Barack Obama too exhausted to be able to focus on foreign affairs.

We should perhaps discount what was said in May. For, as I have attempted to document in detail here, here, here, here, here, and here, President Obama is a gentleman, and, as such, he is never unintentionally rude. He is, in fact, a master of the insulting gesture, which he seems to reserve for political opponents, such as Hillary Clinton, John McCain, and Sarah Palin, and for political leaders in countries, such as England, France, Germany, Israel, and Poland, which were closely associated with the United States prior to the Age of Obama.

This time, however, Barack Obama may be genuinely tired, and he may be depressed as well. He certainly has warrant. In public, he may claim that he deserves a B+ for his first year in office, but the polling data suggests that he has earned a failing mark, and he has to know better.

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Recent headlines seem lifted directly out of an Ayn Rand novel. President Obama decries the “fat cat bankers on Wall Street”. Harry Reid attacks insurance companies for making too much profit. House Democrat leaders call Tea Partiers “Racist, Nazi, Gun Nuts”.  How about this nauseating statement made by Army General George Casey after the Muslim terrorist attack on Ft. Hood?

As great a tragedy as this was, it would be a shame if our diversity became a casualty as well

Each of these headlines might well have been uttered by an Ayn Rand character. Rand, whose father’s pharmacy was confiscated by the Soviets during the communist revolution of 1917, and who came to America in 1926, seems uniquely able to speak to us about the inverted morality of our times. Virtue is to be apologized for. Depravity commands respect. Success is cast as evil and punished while failure is blamed on others and rewarded. Rand’s insights into the psychological state of collectivists—those who demand that we sacrifice our individual freedom and happiness for the sake of the state—explain what often seems incomprehensible to thinking people.

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When President Obama first announced his desire to rid the world of nuclear weapons, I laughed out loud. After all, what’s not to chuckle at?

Would he next offer future generations the gift of flight, like Britain’s Natural Law Party, or promise to abolish death like would-be Russian presidential candidate Grigory Grabovoi, shortly before he was jailed for accepting money to reincarnate a non-existent victim of the Beslan Tragedy?

Of course not, I thought. It’s just the usual political waffle, nothing to waste time thinking about. The president was striking a pose, attempting to sound statesmanlike, that sort of thing. All politicians indulge in this type of empty, grandstanding rhetoric and Obama’s personal weakness for it is well established. Meanwhile he had presented Russia with an opportunity to get rid of a lot of old weapons they didn’t really want any more, without losing face. Perhaps that was the plan: a conciliatory gesture to the Bear in the hope that it would help in other areas. Good luck with that, by the way.

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